Pandit Gopi Nath v. Pandit Bhanu Shanker Yasjnik — 1953 DIGILAW 357 (ALL)

JUDGMENT Malik, CJ. - These two cases are connected and can be disposed of by one judgment. The civil revision arises out of proceedings started u/s 12 of the U.P. Agriculturists' Relief Act and the second appeal has been filed by the mortgagees to enforce their mortgage. 2. On the 4th August, 1936, Fateh Shankar and his son Bhanu Shankar borrowed a sum of Rs. 4,000/ - from Gopi Nath and his son Ram Swarup and mortgaged a shop situate in Aligarh. On the 30th May, 1938, the mortgagees served a notice on the mortgagor claiming payment of the amount, on failure to pay which they said that they would bring a suit on the mortgage. The mortgagor, however, sent a letter on the 7th November, 1938, promising to make some arrangement for payment and it is admitted that since then and before the filing of the suit some payment towards the mortgage was made but the whole amount was not paid. 3. On 8th February, 1944, Bhanu Shankar filed an application u/s 12 of the Agriculturists' Relief Act for the redemption of the mortgage. He impleaded Gopi Nath and his son, Ram Swarup, as Defendants to the action. This case was registered as suit No. 80 of 1944. On 5th May, 1944, the mortgagors filed a suit, No. 184 of 1944, against Fateh Shankar alone. Bhanu Shankar was not impleaded. On 9th May, 1944, Fateh Shankar died and then Bhanu Shankat's name was substituted in suit No. 184 as the legal representative of Fateh Shankar. 4. The trial court dismissed the application of Bhanu Shankar on the ground that Fateh Shankar was not an agriculturist and Bhanu Shankar was not a mortgagor as the shop admittedly belonged to his father and Bhanu Shankar had, therefore, no right to apply u/s 12 of the Agriculturists' Relief Act. The suit filed by the mortgagees for recovery of the mortgage debt was decreed on the same day and a decree for Rs. 2,222/15 was passed in their favour. 5. Bhanu Shankar appealed to the lower appellate court. The lower appellate court has held that both, Bhanu Shankar and Fateh Shankar, were agriculturists, and that Bhanu Shankar was entitled to apply u/s 12 of the Agriculturists' Relief Act for redemption of the mortgage. 2,222/15 was passed in their favour. 5. Bhanu Shankar appealed to the lower appellate court. The lower appellate court has held that both, Bhanu Shankar and Fateh Shankar, were agriculturists, and that Bhanu Shankar was entitled to apply u/s 12 of the Agriculturists' Relief Act for redemption of the mortgage. It thus allowed the appeal and sent the case back to the trial court for determination of the amount due under the mortgage. The appeal against the decree in suit No. 184 of 1944 was allowed and the suit dismissed on the ground that it was premature. 6. The mortgagees have, therefore, come up to this Court in second appeal against the decree of the lower appellate court dismissing their suit No. 184 of 1944 on the ground that it was premature. They have also filed a revision against the order of the lower appellate court in suit No. 80 of 1944 remanding the case to the trial court for determination of the amount due under the mortgage. 7. A number of points have been raised by learned Counsel. One of the points raised is that, Bhanu Shankar not being a mortgagor, he had no right to apply u/s 12 of the Agriculturists' Relief Act. It was also urged that the property in suit being a shop situate in Aligarh, Section 12 of the Agriculturists' Relief Act was not applicable. Lastly, it was urged that the Agriculturists' Relief Act having been repealed by the amendment to the Zamindari Abolition and Land Reforms Act, no decree u/s 12 can now be passed. 8. In the Second Appeal the point raised is that the suit filed for sale on the mortgage was not premature. Three points were raised in this connection. Firstly, that the terms of the mortgage deed indicated that the money was payable immediately and the mere fact that six months notice had to be given before a suit could be filed, did not mean that the mortgagees had no cause of action for the suit. The next point urged was that even if six months notice was necessary, notice had been given on the 30th May, 1938, and the view of the lower appellate court that that notice had been waived and a fresh notice should have been given was erroneous. The next point urged was that even if six months notice was necessary, notice had been given on the 30th May, 1938, and the view of the lower appellate court that that notice had been waived and a fresh notice should have been given was erroneous. Lastly, it was urged that the Defendant having himself admitted that the mortgage amount was due and filed an application for redemption u/s 12 of the Agriculturists' Relief Act, it was not open to him to plead that the mortgagees had no right to claim the mortgage debt. 9. From the mortgage deed it appears that the sum of Rs. 4,000/- was borrowed by Fateh Shankar and Bhanu Shankar. They undertook to pay the amount and both made themselves liable for the same. But the property mortgaged was described as the property of Fateh Shankar alone. As a matter of fact, Bhanu Shankar in the witness-box stated that it was he who had borrowed the money and, us the creditor was not prepared to lend it to him, his father gave his property as security for the debt In the circumstances, the question has arisen whether Bhanu Shankar can be said to be a mortgagor. Mortgagor is defined in Section 58 of the Transfer of Property Act (Act IV of 1882) as a person who has transferred his property. The definition of mortgage is - the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give arise to a pecuniary liability. 10. The transferor is called a mortgagor. From the facts stated above, it would appear that Bhanu Shankar could not be said to be a mortgagor as he had not transferred any interest in any specific immoveable property (see Gaya Pande v. Amar Deo Pande 22 A.L.J.R., 855. The question thus arises whether he was entitled to apply u/s 12 of the Agriculturists' Relief Act. Section 12 provides that- ... an agriculturist who has made a mortgage either before or after the passing of this Act, or any other person entitled to institute a suit for redemption of the mortgage, may......................, file an application.... 11. The question thus arises whether he was entitled to apply u/s 12 of the Agriculturists' Relief Act. Section 12 provides that- ... an agriculturist who has made a mortgage either before or after the passing of this Act, or any other person entitled to institute a suit for redemption of the mortgage, may......................, file an application.... 11. The point for decision, therefore, is whether Bhanu Shankar who was not a mortgagor could be said to be a "person entitled to institute a suit for redemption" and thus entitled to file an application u/s 12. Who can sue for redemption is laid down in Section 91 of the Transfer of Property Act as: Besides the mortgagor, any of the following persons may redeem, or institute a suit for redemption of, the mortgaged property, namely:- (a) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon, the property mortgaged or in or upon the right to redeem the same; (b) any surety for the payment of the mortgage-debt or any part thereof; or (c) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property. 12. Learned Counsel for the Respondent has urged that Bhanu Shankar must be deemed to be a surety and, therefore, can claim to have the right to redeem under Clause (b) of Section 91 of the Transfer of Property Act. Bhanu Shankar has himself admitted that he was the principal debtor and his father was a surety for him and, as the creditor would not lend the money to him, his father had to give his property by way of security. Clause (b) of Section 91 of the Transfer of Property Act, therefore, does not help the Respondent. 13. In the alternative it is urged that Bhanu Shankar being a co-debtor under the terms of the mortgage deed and being liable for payment of the debt he must be deemed to be a person who is interested in the right of redemption. There can be no doubt that Bhanu Shankar was interested in the redemption of the mortgage. 13. In the alternative it is urged that Bhanu Shankar being a co-debtor under the terms of the mortgage deed and being liable for payment of the debt he must be deemed to be a person who is interested in the right of redemption. There can be no doubt that Bhanu Shankar was interested in the redemption of the mortgage. The mortgage carried interest at a certain rate and so long as the personal remedy was not barred it was open to the mortgagee to proceed against the person and other property of Bhanu Shankar. In Halsbury's Laws of England Hailsham Edition, Page 301, Paragraph 453 it is provided that: The mortgagor and all persons having any interest in the property subject to the mortgage or liable to pay the mortgage debt can redeem. 14. In Ghose's Law of Mortgage, fifth edition, Volume I, Page 255, the learned author has given the list of persons who can file a suit for redemption of a most-gage and has said. The right to redeem may also be claimed by a person who is liable to pay either the whole or a part of the mortgage-debt. 15. Bhanu Shankar thus being liable to pay the mortgage debt, in our view, he can be said to be a person who was entitled to redeem and he could, therefore, file an application u/s 12 of the Agriculturists' Relief Act. 16. It has been urged by learned Counsel that Section 12 of the Agriculturists' Relief Act refers' only to a mortgage of land as defined in the Act or a grove and it does not apply to a mortgage of a shop in the municipal limits. The Agriculturists' Relief Act, as its preamble indicates, was for relief of agriculturists from indebtedness and there is no section in the Act which confines the benefit to indebtedness on security of agricultural land only. The Agriculturists' Relief Act, as its preamble indicates, was for relief of agriculturists from indebtedness and there is no section in the Act which confines the benefit to indebtedness on security of agricultural land only. No doubt in Section 9 of the Act it is provided that if the possessory mortgage is of land or grove executed by an agriculturists then, notwithstanding anything contained in the Transfer of Property Act, 1882, or any contract to the contrary, it shall not be valid unless the mortgagee is authorized to retain such possession and to receive the rents and profits of such land or grove both in lieu of interest and towards payment of the principal, and on condition that after the expiry of a fixed term not exceeding twenty years the mortgaged land or grove shall be re-delivered to the mortgagor and the mortgage debt shall be deemed to have been discharged. This is a special provision with respect to a possessory mortgage of agricultural land or grove. The section does not provide that the Act will not apply to mortgages executed by agriculturists of properties other than agricultural land grove. The provisions of Section 9 of the Agriculturists' Relief Act, therefore, are irrelevant in considering the question whether the word "property" means only agricultural land and grove and no other kind of property. Reliance is also placed on the explanation to Section 12 which is as follows:- For the purposes of Sections 11 and 12 the word "property" includes grove. 17. It is pointed out by learned Counsel that, if the word "property" in Sections 11 and 12 of the Agriculturists' Relief Act meant any kind of property, it was not necessary to add an explanation that it includes 'grove'. It may be that the explanation was added as a matter of extra precaution. The explanation can be taken into consideration in interpreting the section itself, but it cannot be deduced therefrom that the word "property" was intended to mean agricultural land only. After considering the scheme of the Act and the manner in which it has been interpreted by this Court it is not possible for us to confine Section 12 to cases where mortgaged property consists only of agricultural land or grove. 18. After considering the scheme of the Act and the manner in which it has been interpreted by this Court it is not possible for us to confine Section 12 to cases where mortgaged property consists only of agricultural land or grove. 18. Learned Counsel for the Respondent has pointed out that Section 12 has been applied to mortgages made by agriculturists of all kinds of property and not necessarily agricultural land or grove and he could off hand give us reference to Second Appeal No. 599 of 1947, connected with Civil Revision No. 668 of 1948 (Raj Bahadur v. Hakim Ajudhia Prasad (2), decided on 23rd September, 1953, where the application u/s 12 of the Agriculturists' Relief Act had been filed for redemption of a mortgage of house properly, executed by an agriculturist. The provision being for relief of agriculturists from' indebtedness there is no reason, in the absence of any express or clear provision in the Act, to allow that benefit only where the mortgage security consists of agricultural land or grove. We are, therefore, of the opinion that Section 12 of the Agriculturists' Relief Act applied and the application for redemption of the mortgage could be filed by Bhanu Shankar. 19. Lastly, it is urged that the Agriculturists' Relief Act having been repealed by the Zamindari Abolition (Amendment) Act no decree u/s 12 of the Agriculturists' Relief Act can now be passed. The Zamindari Abolition and Land Reforms Act was passed in 1951 but it came into force from the 1st of July, 1952, under a notification issued by the State Government. Section 339 of the Act provides that with effect from the date of the publication of the notification u/s 4 of the Act in respect of any area the enactments mentioned in List I of Schedule III shall be and are hereby repealed in their application to such area. The Agriculturists' Relief Act was not included in List 1 of Sch. III. By the Amending Act No. XVI of 1953 List I of Schedule III was amended and the U.P. Agriculturists' Relief Act was added to that list. This change was made on the 19th of June, 1953, while the decree for redemption was passed by the lower court on the 31st of October' 1945. III. By the Amending Act No. XVI of 1953 List I of Schedule III was amended and the U.P. Agriculturists' Relief Act was added to that list. This change was made on the 19th of June, 1953, while the decree for redemption was passed by the lower court on the 31st of October' 1945. Two questions arise in this connection; firstly, whether the subsequent repeal of the Act makes it necessary for us to interfere and set aside the decree passed by the lower court and, secondly, whether the repeal at all affects this case. The U.P. Agriculturists' Relief Act has been repealed only with respect to any area with regard to which a notification u/s 4 of the Zamindari Abolition and Land Reforms Act may have been issued by the State Government. The U.P. Agriculturists' Relief Act, therefore, has not been repealed in its entirety and with respect to any area with regard to which no notification u/s 4 has been issued the Act still remaining force. 20. The argument of learned Counsel is that though the repeal is only in respect of any area with regard to which a notification u/s 4 is issued yet Bhanu Shanker is not entitled to get the benefit of the Act because he was an agriculturist, as he paid rent for agricultural land not exceeding Rs. (sic)00/ - per annum. In other words, the argument is that if a person holds agricultural land in an area to which the Zamindari Abolition and Land Reforms Act has been made applicable by a notification u/s 4 then he cannot claim the benefit under the U.P. Agriculturists' Relief Act, even though the mortgage is of property not situate in a village but within a municipal limit. That on the other hand if Bhanu Shankar could claim to be an agriculturist because he paid rent for agricultural land within municipal limits, to which the notification u/s 4 does not apply, then no matter whether the mortgaged property is situate within the municipal limits or not he can take advantage of the U.P. Agriculturists' Relief Act. That on the other hand if Bhanu Shankar could claim to be an agriculturist because he paid rent for agricultural land within municipal limits, to which the notification u/s 4 does not apply, then no matter whether the mortgaged property is situate within the municipal limits or not he can take advantage of the U.P. Agriculturists' Relief Act. It is not necessary for us to go into this question in this case as in our view the repeal of the U.P. Agriculturists' Relief Act would not affect the decision, the decree for redemption having been passed by the lower court id the year 1945, long before the Zamindari Abolition and Land Reforms Act came into force. 21. In this connection learned Counsel for the Respondent has urged that the courts of appeal in India are not courts of rehearing but are only courts of error. This submission is against the decision of the Federal Court in Lachmeshwar Prasad Shukul and Ors. v. Keshwar Lal Chaudhuri and Ors. 1940 F.C.R. 84 at 100. Whether a court of appeal is a court of re-hearing or merely a court of error does not arise in this case because the decree for redemption passed by the lower appellate court was final and only a Civil Revision u/s 115 of the CPC has been filed in this Court. The scope of Section 115 of the CPC is very limited. We have only to see whether the court which passed the order had exercised a jurisdiction not vested in it by law, or failed to exercise its jurisdiction or had acted with any material irregularity in the exercise of its jurisdiction. None of these points arise in the case and the Civil Revision must, therefore, be dismissed on that ground. The repeal of the Agriculturists' Relief Act, therefore, during the pendency of the Civil Revision cannot affect the rights of Bhanu Shankar under the decree passed by the lower court. 22. Coming to the Second Appeal, the only point that arises for decision is whether the suit was premature. The relevant portion of the mortgage deed is as follows: - When the creditor desires to demand money from us they may give us a six months' notice, after the expiry whereof it will be open them to take proceedings in court according to law. 23. The relevant portion of the mortgage deed is as follows: - When the creditor desires to demand money from us they may give us a six months' notice, after the expiry whereof it will be open them to take proceedings in court according to law. 23. Reliance is placed, on the words "when the creditors desire to demand money from us they may give us a six months' notice and it is after the expiry of that period that they will be entitled to take proceedings in a court of law". But in the earlier part of the document it is mentioned that the amount of debt is payable on demand and the interest is payable at the end of every year. The mortgage is not for a period and it was open to the mortgagor to redeem the mortgage on the date when the mortgage deed was executed. Reading the document as a whole, therefore, we are satisfied that the intention of the parties was that the mortgage was not to be for a period. It was open to the mortgagor to pay the mortgage amount at any time he liked. It was open to the mortgagee to claim the amount immediately after the execution of the mortgage deed. If, however, the mortgage money was claimed and was not paid and the mortgagee wanted to file a suit the deed provided that the mortgagee would be entitled to file a suit on the expiry of the period of six months This was merely to save unnecessary expenses being incurred in the filing of the suit and to enable the mortgagor to arrange for the money and pay it up to the mortgagee. It cannot, therefore, be said that the mortgagee had no cause of action to file a suit before the expiry of six months. If, however, a suit was filed before the expiry of that period, the court might deprive the mortgagee of his costs. In this connection we may refer to the decision of the Privy Council in Lasa Din v. Gulab Kunwar 1932 A.L.J.R. 913, where their Lordships of the Judicial Committee pointed out that the right of the mortgagee to claim his money and the right of the mortgagor to redeem must be co-extensive. Before the mortgagee filed his suit on the basis of the mortgage Bhanu Shanker had already filed a suit for redemption. Before the mortgagee filed his suit on the basis of the mortgage Bhanu Shanker had already filed a suit for redemption. In view of the fact that Bhanu Shanker had filed a suit for redemption, it is difficult to hold that the suit filed by the mortgagee was premature. 24. The mortgagee had given a notice on the 30th of May, 1938, claiming payment of the amount. The suit on the basis of the mortgage was filed long after the expiry of six months. The fact that the mortgagors had made some payments from time to time and the mortgagee had received the amount, does not amount in law to waiver. To prove waiver the Defendant must establish that the mortgagee had, for consideration, agreed to give up his right, so that his right to sue based on the notice came to an end. 25. We are, therefore, of the opinion that the second appeal should be allowed and the order of the lower court dismissing the suit on the ground that it was premature be set aside. In view, however, of the fact that proceedings u/s 12 of the U.P. Agriculturists' Relief Act are pending the decision of the Civil Suit No. 184 of 1944 must remain stayed. After the amount payable by the mortgagor for retention of the mortgage has been finally determined in the proceedings u/s 12 of the Agriculturists' Relief Act if the mortgagor fails to deposit the amount in court within the time allowed in accordance with the provisions of Section 12, a decree will have to be passed for sale of the property in suit No. 184 of 1944. We order accordingly. 26. As we have dismissed the revision and allowed the appeal we consider it is a fit case in which the parties should bear their own costs.